Gregor MacGregor-  Prince of Frauds

An engraving from Sketch of the Mosquito Shore, purporting to depict the “port of Black River in the Territory of Poyais

If you are like me, your world geography is a bit fuzzy.  This is not a new thing, and was probably worse in the past when new lands were being discovered by Europeans, renamed and divvied up.  They also didn’t have handy Professor Google to teach them where things were.  Maps were a sketchy business.  So when an ambitious Scotsman came forward claiming to the the Prince, or Cazique, of Poyais, most people did not realize Poyais did not exist.

During the Napoleonic Wars, former Spanish and Portuguese colonies were benefiting from the upheaval in the mother countries.  Most of the countries of South America gained their independence between 1809 and 1825.  However, with independence they went a little crazy to generate cash flow.  South America was rife with gold and silver mines, so they should be fine, right?  Well, no.  The new countries issued bonds backed by their shiny new governments and the mining companies issued stocks.  Both promised huge returns for investors.  As we have seen in recent financial shenanigans, over promising generally leads to bubbles and bubbles burst.  Three of these bubbles hit the London Stock Exchange in the early 19th century-  the Canal Bubble of the 1810s, the South American Bubble of the 1820s, and the Railroad Bubble of the 1840s.  However, before the bubbles burst investor confidence was high, cost of living was falling and wages were going up.  Interest rates drifted down, with the government borrowing more and more cheaply.  Money was everywhere just waiting for someone to take it.

Into this environment came Gregor MacGregor.  He had been born in Glengyle near Loch Katrine in 1786.  He joined the Royal Navy in 1803 and was a Colonel in the Venezuelan War of Independence.  In 1817, he led a questionably-sanctioned group of War of 1812 vets in an attempt to drive the Spanish from Florida.  This effort failed, but he was generally well regarded and appeared successful.  South American investments were in vogue, and so when he returned to London in 1820, MacGregor declared that he had a sweet deal for anyone interested.  Through his adventures, he claimed he had been named the Cacique or Prince of the Principality of Poyais by the native chief King Frederic Augustus I of the Mosquito Shore and Nation.  According to MacGregor, Poyais was a paradise located on where the Black River emptied into the Bay of Honduras and overflowing with natural resources.  He claimed the water was pure and gold nuggets just lay on the riverbanks waiting for some industrious person to collect them.  The country was so fertile, he bragged, that there were three maize harvest a year.  Tree branches grew heavy with ripe fruit and abundant game froliced in their shade.  It sounded like heaven compared to dank rainy Scotland.  To publicize this paragon of lands, MacGregor published “Sketch of the Mosquito Shore, including the the Territory of Poyais”.  This was supposed to have been written by a Captain Thomas Strangeways.  He described the natives as lining up to serve the English settlers in the capital of St. Joseph.  The problem with all of this was it was completely fiction.

MacGregor did get land from King Frederic Augustus I in April 1820, but the only thing there were four run down buildings surrounded by jungle.  That hardly mattered as the book by “Captain Strangeways” gained readers and investors lined up to get a piece of Poyais.  There was a price to suit the means of every kind of investor.  The rich could buy 2000 bonds at 100 pounds a piece.  These would return 3% interest.  For the more modest investor, he offered land for sale at the rate of 3 shillings, 3 pence per acre (later 4 shillings), which was about a day’s wages in 1822.  The bonds alone netted 200,000 pounds in sales.  Then MacGregor set about selling positions in the military and in the government.  He even issued his own currency.  In just one year, MacGregor would have been a multi-millionaire in today’s money.

Unbelievably, seven ships set out for the fictional Poyais in 1823.  MacGregor must have been sweating, but he brazened it out.  250 settlers in all arrived in “Poyais” mid 1823.  When they arrived they found no town, no helpful natives and nothing as it was promised.  People went hungry and plagues of malaria and yellow fever took their toll.  Passing ships took some of the settlers to Belize, but even then two thirds of them died.  The British Navy had to send out ships to turn back more settlers that were on their way.

As for MacGregor?  He escaped to France with his ill gotten gains.  Then in France started the whole pitch again.  This time, he was not lucky and ended up in prison for his efforts.  He died in 1845 in Caracas.  The land that was the paradise of Poyais?  Still unsettled to this day.

ER

Sources available on request